“Somewhere, something incredible is waiting to be known,” said astronomer Carl Sagan, who succinctly
captured the essence of what it means to be a researcher.

That wide-eyed sense that anything is possible through research and development—that we can
help solve some of the most critical challenges by increasing our knowledge and understanding
of the world—that’s the essence of a researcher’s calling.

But innovation is improbable without proper funding, so we project how political developments
and economic conditions around the globe will affect R&D support in 2014. This forecast is for
policymakers and researchers alike because of the multiplier effect R&D investment can have,
both in economic and cultural terms. There is an important relationship between economic
growth and research and development, between industry creation and political stability, and between the nurturing of research and sowing the seeds of a middle class in developing nations.

While R&D funding isn’t the sole indicator of how a nation, region or industry will perform, it
certainly is a fundamental consideration among other factors like science, technology, engineering
and mathematics education levels, capital markets, healthcare, infrastructure, property rights and
immigration policy.

Each section of this report forecasts research and development levels for 2014, closely examining
the expected funding for a region or industry. There are many important projections and key findings for each country and industry under discussion.

Among the most far-reaching projections for 2014 are the following:

U.S. tops the list, but China is closing in:

• The ranking of the top ten countries as measured by R&D spending isn’t expected to change
in 2014, with the U.S. reprising its role as the dominant force in global research across numerous industries.

• U.S. federal spending on R&D, a large contributor to R&D momentum in the U.S., is in turmoil because of enormous pressures to pare federal spending, especially defense and aerospace budgets.

• The growth in China’s R&D budgets will far outpace those of the U.S., which has resumed
modest growth that is expected to be relatively stable through 2020.

• At the current rates of growth and investment, China’s total funding of R&D is expected to
surpass that of the U.S. by about 2022.